In comparison with stator current, supply-side current of invert-fed squirrel-cage induction motor is convenient to acquire and immune to noise. However, when a motor operates under light load or no-load conditions, the motor current signature analysis (MCSA) method based on supply-side current can not diagnose the broken rotor bar faults of inverter-fed squirrel-cage induction motor due to the spectrum leakage submerging other spectral response in its vicinity. In this paper, a simplified model of supply-side current harmonic signal for squirrel-cage induction motor is firstly established using the transfer function concept and frequency modulation theory. A diagnosis method of broken rotor bar faults of inverter-fed squirrel-cage induction motor at no-load based on Hilbert demodulation technique is proposed. The core of the method is to extract the envelope of the supply-side current signal under the motor steady operation condition using Hilbert transform, construct the analytic signal based on the square of the envelope and perform the FFT spectrum analysis of the signal. The experiment verification was performed on a 3 kW motor experiment test bench; the experiment results prove the effectiveness of the proposed method.